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LANSING — Metropolitan Health Corp. is on the verge of securing the rule change in Lansing needed to begin pursuing its vision of developing a suburban hospital campus in Kent County.

Metro President and CEO Mike Faas says the health system can meet the criteria set down in a new standard for hospital relocations in Michigan. The state Certificate of Need Commission on April 11 approved and sent for public comment the new standard that established the conditions under which a hospital may relocate more than two miles from its present site.

“At this point, we are happy with that,” Faas said. “Metro and West Michigan can live with the criteria laid down for us.”

The CON Commission’s action comes after months of sometimes contentious discussions between Metro and parties who participated in formulating a rule change. The commission will act at its next meeting May 15 to formally adopt the standard and send it on for concurrence by the Legislature.

Once it takes effect, the new standard will give Metro Health the ability to begin seeking state approval to move 10 miles, from Grand Rapids’ southeast side to Wyoming, where it wants to build a new $155 million hospital that would anchor a “health care village,” which the health system envisions developing with other care providers.

Faas expects that Metro, presuming the standard wins final adoption and takes effect in late June, will file a letter of intent with the state Department of Community Health this summer and follow it up with a formal application within 12 months.

Submittal of a formal application to the state may not come until next year, Faas said.

“All this really does is open the door and start the process,” he said of the pending rule change. “We haven’t started yet. Now we start.”

While Metro first unveiled its plans for a move more than a year ago, it’s been hesitant until now to begin working with architects beyond the conceptual stage on details of the new hospital’s scope and size.

Faas wanted to wait until a new standard was close to being put in place until proceeding with detailed plans that are needed to secure permission to relocate. That process will have to take into account all of the trends affecting health care not only today but over the next decade or two, he said.

“All of this takes time,” Faas said. “What should we build to take care of people years into the future? We would be short-sighted if we simply replicated what we are today.”

In approving a new relocation standard, the CON Commission sought to strike a balance between competing proposals from an ad-hoc committee and the Department of Community Health. The goal was to formulate a rule change that allows Metro to move, but not open the door for other hospitals in the state to pull out of inner-city locations for a new site with a more favorable payer mix.

A new standard is needed as a way to create an exemption to the present state rule that prohibits hospitals from relocating more than 10 miles from their present location in a market deemed to have an excess of hospitals beds, as is the case with Kent County.

The proposal by the Department of Community Health was supported only by Metro and received objections from representatives from hospitals across the state who said it was too vague, set virtually no criteria for hospital relocations, was driven by narrows interests (Metro’s), and gave far too much discretion to the department in deciding whether a facility could move.

“It is an invitation to arbitrary and capricious action by the department,” said Jim Forsema, an attorney with the Detroit law firm Miller Canfield who represents Covenant Medical Center in Saginaw. “These just absolutely grant the department complete and unfettered discretion.”

The department, in turn, opposed the proposal from the CON Commission’s ad-hoc committee, partly because Metro executives said they could not meet the standards it set down.

The CON Commission decided to take the department’s language and mix it with a few elements of what the ad-hoc committee proposed, to formulate a new standard that would allow a hospital to move more than two miles when it has a “clear and convincing” case, such as when it’s landlocked at its present location, and meets other criteria. The criteria include requiring an “appropriate combination” of clinical services near the site being vacated — which Metro plans to do with the retention of the Breton Health Plaza located about a mile from the hospital — and the availability of transportation to the new site.

Hospitals also would have to demonstrate that no land is available within two miles for a new facility, that access to indigent, low-income and disadvantaged patient populations is maintained, and that it has the support of local communities to move.

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